Correlation Between Baselode Energy and Surge Copper
Can any of the company-specific risk be diversified away by investing in both Baselode Energy and Surge Copper at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Baselode Energy and Surge Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baselode Energy Corp and Surge Copper Corp, you can compare the effects of market volatilities on Baselode Energy and Surge Copper and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Baselode Energy with a short position of Surge Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baselode Energy and Surge Copper.
Diversification Opportunities for Baselode Energy and Surge Copper
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Baselode and Surge is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Baselode Energy Corp and Surge Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Copper Corp and Baselode Energy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Baselode Energy Corp are associated (or correlated) with Surge Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Copper Corp has no effect on the direction of Baselode Energy i.e., Baselode Energy and Surge Copper go up and down completely randomly.
Pair Corralation between Baselode Energy and Surge Copper
Assuming the 90 days trading horizon Baselode Energy Corp is expected to under-perform the Surge Copper. But the stock apears to be less risky and, when comparing its historical volatility, Baselode Energy Corp is 1.22 times less risky than Surge Copper. The stock trades about -0.26 of its potential returns per unit of risk. The Surge Copper Corp is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Surge Copper Corp on September 1, 2024 and sell it today you would lose (1.50) from holding Surge Copper Corp or give up 13.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baselode Energy Corp vs. Surge Copper Corp
Performance |
| Timeline |
| Baselode Energy Corp |
| Surge Copper Corp |
Baselode Energy and Surge Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baselode Energy and Surge Copper
The main advantage of trading using opposite Baselode Energy and Surge Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baselode Energy position performs unexpectedly, Surge Copper can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Surge Copper will offset losses from the drop in Surge Copper's long position.| Baselode Energy vs. MTY Food Group | Baselode Energy vs. Definity Financial Corp | Baselode Energy vs. CI Financial Corp | Baselode Energy vs. Renoworks Software |
| Surge Copper vs. Kutcho Copper Corp | Surge Copper vs. CANEX Metals | Surge Copper vs. Highland Copper | Surge Copper vs. District Copper Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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